Select Committee on Standards and Privileges First Report


Alleged Non-Declaration of Interests

  829. The requirement to declare relevant interests applies not only to proceedings in the House but also to transactions or communications with other Members, and with Ministers or servants of the Crown. The requirement is more onerous than for registration in that it relates to "any relevant pecuniary interest or benefit of whatever nature, whether direct or indirect, that [a Member] may have had, may have, or may be expecting to have."[352]

  830. It is clear from the relevant departmental papers that this requirement was breached by Members involved in the House of Fraser lobbying group; and by those lobbying in relation to Skoal Bandits.

  831. In the case of the House of Fraser lobbying group, there is some evidence that Sir Peter Hordern declared his House of Fraser consultancy at least once in communicating with Ministers; and it is probably true to say that they were aware of this association. By the standards applying at the time this may well have been regarded as sufficient to meet the requirement to declare his interests, though it clearly fell well short of the terms of the Resolution of 1974.

  832. Mr Smith acknowledges that, in his dealings with Ministers and officials, he should have declared his interest and regrets not having done so. He accepts that a possible reason for this was that his representations would carry more weight coming from an officer of the Conservative Party Trade and Industry Committee than from a paid lobbyist. Notwithstanding his denials, it seems to me that his interest was so obvious that his failure to disclose it when making representations must have been deliberate.

  833. Mr Hamilton also referred, when making representations to Ministers and others, to his position as Vice-Chairman of this Committee rather than to any pecuniary interest or benefit he was receiving from Mr Greer - Mr Al Fayed's paid lobbyist. Even if he had not been in receipt of any cash payments from Mr Al Fayed or from Mr Greer, he enjoyed at various stages hospitality and other registrable benefits provided by the former. In my judgment the existence of those rewards should have been disclosed. The receipt of cash payments, directly or indirectly, from Mr Al Fayed puts Mr Hamilton in exactly the same position as Mr Smith and renders him equally culpable in not registering or declaring his financial interests.

  834. Sir Andrew Bowden and Sir Michael Grylls both claim that declaration was unnecessary since, to their knowledge, their benefits came from Mr Greer, not Mr Al Fayed. On the other hand, the fact that a financial relationship existed between them and Mr Al Fayed's paid lobbyist was pertinent to the departments concerned and should have been acknowledged.

  835. In addition to a failure to declare relevant interests there were, in the case of Sir Andrew Bowden and Mr Hamilton, occasions when each misrepresented his motives for making approaches to Ministers by referring to reasons other than membership of the lobbying group. This was misleading conduct on their part.

  836. The two Members who lobbied Ministers on behalf of Skoal Bandits were Mr Hamilton and Mr Brown, both of whom received commission payments from Mr Greer for the introduction of UST (the manufacturers of the product). There is no evidence of any appropriate declaration and neither Member claims to have made one. The three Ministers receiving representations confirmed this position although one (Mrs Currie) said it was no secret that the Members "were being paid by tobacco lobbyists". Mr Mellor, on the other hand, said he would not have seen them had he known that they had such a commercial relationship with UST via Mr Greer.

Other Allegations of Misconduct

  837. Two Members, Mr Hamilton and Sir Michael Grylls, are the subject of further allegations, including the acceptance of additional payment for representing constituents.

Mr Hamilton

  838. There is no dispute about the fact that Mr Hamilton received a commission payment from Mr Greer for introducing the National Nuclear Corporation (NNC) to IGA; and a year's consultancy fee from NNC of £7,500. NNC is a company based in Mr Hamilton's constituency.

  839. Mr Hamilton defends the consultancy on the grounds that the approach came from NNC; that his support for nuclear power was not affected by payment; and that the fee represented additional time and effort put in on the company's behalf. He did not inform the company of the introduction fee since the two types of payment were not connected in his mind.

  840. In my view this position is unsustainable. A Member has a duty to pursue the interests of his constituents and should not take additional payment for doing so. The fact that his actions in Parliament are not influenced by such a payment is irrelevant. Moreover, placing oneself under an apparent obligation to a particular company - especially in an area as contentious as nuclear power - is bound to create a conflict of interest in relation to constituents who are opposed to its objectives. The acceptance by Mr Hamilton of a substantial fee from Mr Greer for introducing to IGA a company based in his constituency also causes considerable concern. The true position is that Mr Hamilton was enriching himself at the indirect expense of this constituent; he should not have accepted such a fee.

  841. It was also alleged that in 1989 Mr Hamilton accepted a one year consultancy worth £10,000 from Mobil Oil (which he duly registered), in return for which he tabled Parliamentary questions. This allegation is not borne out by an analysis of Mr Hamilton's Parliamentary activity during the relevant period and I do not therefore find it substantiated.

Sir Michael Grylls

  842. Sir Michael Grylls accepted a commission payment from Mr Greer for introducing Charles Church, a company in his constituency, to IGA. For the reasons set out in paragraph 840 above I consider this to be unacceptable.

  843. Finally, The Guardian also alleged that Sir Michael engaged in "commission-seeking" by making his support on an issue concerning Rank Xerox conditional on that firm's switching from its own public relations adviser to IGA. This is denied by Sir Michael and the evidence in support of the charge is inconclusive.

Allegations of Non-Registration of Donations to Election Expenses

  844. Following the statement of the Speaker on 14 October 1996, and at the request of the Select Committee on Standards and Privileges, my inquiry has extended to allegations, or implied allegations, in the public domain, even where no formal complaint against the Member concerned has been made. These allegations were taken from press reports or other publications and concerned, in particular, payments made by Mr Greer to the campaign funds of various Members in connection with the general elections of 1987, 1992 or both. The reports implied that the Members had committed an irregularity by failing to register these donations in the Register of Members' Interests.

  845. Broadly speaking, the rules, as they applied at these two elections, required the registration of donations where, to the Member's knowledge, these exceeded 25 per cent of the Member's declared election expenses.

  846. In its Fifth Report of Session 1996-97 the Select Committee on Standards and Privileges endorsed my conclusion that for the following Members the position was completely straightforward and that no contravention of the rules had taken place:

    Mr Robert Atkins, Mr Alan Beith, Mr Vivian Bendall, Mr John Bowis, Sir Graham Bright, Sir Anthony Durant, Mrs Gwyneth Dunwoody, Mr Doug Hoyle, Mr David Mellor, Mr Michael Portillo, Mr David Shaw, Mr Chris Smith, Sir Malcolm Thornton, Sir Gerard Vaughan and Sir John Wheeler.

  847. Four other Members had been referred to in this context. Of these, the cases of two - Sir Andrew Bowden and Mr Gerry Malone - have been discussed earlier in the Report. The remaining two Members were Mr Nirj Deva and Mr Norman Lamont.

Mr Deva

  848. From evidence given to this inquiry it appears that Mr Greer made a donation of £750 towards Mr Deva's election expenses in 1987. Whether there was also a contribution in 1992 is not known.

  849. I asked Mr Deva for information in respect of the two elections by which I could determine whether the donations were registrable or not. Mr Deva took the view that, since he had received no personal benefit, this was a matter for the local Conservative association.

  850. The contribution in 1987 was clearly not registrable because Mr Deva was not elected: and I have no reason to believe that a contribution (if any) provided in 1992 would have exceeded 25 per cent of election expenses.

  851. However, the point raised by Mr Deva's case is an important one. It can be argued that, by distancing himself from his party organisation in regard to election donations he could avoid the obligation to register, however large the sum involved, since the present rule would only bite if "to his knowledge" the contribution exceeded 25 per cent of election expenses.

  852. If the rule on the registration of election donations is to mean anything, it must be accepted that the onus is on the Member to establish the size of the gift and the proportion that it represents of his or her declared election expenses.

Mr Lamont

  853. Mr Lamont's Conservative association received £2,000 from IGA at the time of the 1987 election and £5,000 from DHL at the time of the 1992 election. On the face of it both were registrable.

  854. Mr Lamont states that these funds were paid into a much larger continuous fighting fund; that campaign expenses were paid out of this fund; and that there was therefore no way of establishing the precise size of the contribution towards the expenses which came from IGA or DHL.

  855. In my view such an arrangement defeats the spirit of the registration requirements.

  856. I do not consider that it would be appropriate to criticise Mr Lamont personally since there is genuine doubt about the interpretation of the rules, both as they stood in 1987 and 1992, and now. It does, however, suggest that this aspect of the registration rules needs further clarification, together with the issue of the definition of the official election period for the purposes of calculating the level of declarable expenditure, which is raised by the case of Sir Andrew Bowden.

352  Resolution of the House of 22 May 1974. Back

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Prepared 8 July 1997